T, U, V Terms

T

Tax Bracket – Please select the tax bracket you fall under. If you are unsure what tax bracket you are in, you may want to speak with an accountant find out.

Tax Savings – This is the amount of money you save in income taxes. You save this money because in most cases the interest you pay on your home loan is tax deductible!

Tax Service – A fee collected to set up a third-party to monitor the borrower’s property tax payments to ensure that the payments are made on time, and to prevent tax liens from occurring.

Tenancy By The Entirety – A type of joint tenancy of property that provides right of survivorship and is available only to a husband and wife. One spouse dies the property goes to the other spouse. Contrast with tenancy in common and joint tenancy.

Tenancy In Common – A type of joint tenancy in a property without right of survivorship. Contrast with tenancy by the entirety and with joint tenancy.

Term – The term of a home loan is the number of years the home loan is amortized for. Home loans are generally amortized over 15, 20 or 30 years.

Termite Report – A report that results from an inspection by a professional to determine if the property has termites.

Third Party Fees – Fees collected by lender for services provided by other companies, such as an appraiser.

Third Party Origination – A process by which a lender uses another party to completely or partially originate, process, underwrite, close, fund, or package the home loan. See mortgage broker.

Title – A legal document evidencing a person’s right to or ownership of a property.

Title Company – A company that specializes in examining and insuring titles to real estate.

Title Insurance – Insurance that protects the lender (lender’s policy) or the buyer (owner’s policy) against loss arising from disputes over ownership of a property.

Title Insurance Endorsements – This is an endorsement of insurance against losses that may result from claims of previously unknown ownership in insured property.

Title Search – A check of the title records to ensure that the seller is the legal owner of the property and that there are no liens or other claims outstanding.

Total Expense Ratio – Total obligations as a percentage of gross monthly income. The total expense ratio includes monthly housing expenses plus other monthly debts. Used to help qualify a potential borrower for a home loan.

Total Monthly Payment – See Monthly PITI payment.

Transaction Fee – A fee charged each time the borrower draws on the credit line.

Transfer of Ownership – Any means by which the ownership of a property changes hands. Lenders consider all of the following situations to be a transfer of ownership: the purchase of a property “subject to” the mortgage, the assumption of the mortgage debt by the property purchaser, and any exchange of possession of the property under a land sales contract or any other land trust device.

Transfer Tax – State or local tax payable when title to a property passes from one owner to another.

Treasury Index – An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans. It is based on the results of auctions that the U.S. Treasury holds for its Treasury bills and securities or is derived from the U.S. Treasury’s daily yield curve, which is based on the closing market bid yields on actively traded Treasury securities in the over-the-counter market. See adjustable-rate mortgage (ARM).

Truth-in-Lending – A federal law that requires lenders to fully disclose, in writing, the terms and conditions of credit, such as a mortgage, including the annual percentage rate (APR) and other charges.

Two To Four-Family Property – A property that consists of a structure that provides living space (dwelling units) for two to four families, although ownership of the structure is evidenced by a single deed. See multi-unit housing.

Trustee – A fiduciary who holds or controls property for the benefit of another.

U

Underwriting – The analysis of risk, the determination of the appropriate loan amount, and the setting of loan terms and conditions, based on the borrower’s creditworthiness and the value of the real property that will secure the loan.

Unsecured Loan – A loan that is not backed by collateral.

V

VA Mortgage – A mortgage that is guaranteed by the Department of Veterans Affairs (VA). Also known as a government mortgage.

Variable Rate – An interest rate that changes periodically in relation to an index. Payments may increase or decrease per the terms of the loan agreement or note.

Vested – Having the right to use a portion of a fund such as an individual retirement fund. For example, individuals who are 100 percent vested can withdraw all of the funds that are set aside for them in a retirement fund. However, taxes may be due on any funds that are actually withdrawn.

Veterans Affairs, Department of (VA) – An agency of the federal government that guarantees residential mortgages made to eligible veterans of the military services. The guarantee protects the lender against loss and thus encourages lenders to make mortgages to veterans.